Price is not the only thing that changes how much people buy. When anything else changes — income, fashion, the price of a rival product — buyers want a different amount at every price, and the whole curve moves. Telling that apart from a movement along the curve is one of the most heavily examined skills in the course.
📚 What you need to know
Factors that change demand regardless of price are the non-price determinants of demand.
There are five: real income, tastes and preferences, the price of related goods, the number of consumers, and future price expectations.
A change in any of them shifts the entire curve. Right is an increase in demand; left is a decrease.
Substitutes are bought instead of each other. Complements are bought together.
A price change causes a movement along the curve and a change in quantity demanded. A non-price change causes a shift and a change in demand.
What a shift looks like
A shift means buyers want a different quantity at every single price, not just at one. The original price can stay exactly where it is and the quantity demanded still changes.
If a firm advertises heavily and more people become aware of the product, demand rises from D to D1: the price is still $8, but 40 units are now demanded instead of 30.
The five non-price determinants
Determinant
How it works
Shifts right (increase) when
Shifts left (decrease) when
Real income
Income decides how many goods and services a consumer can enjoy. For most goods the relationship with demand is direct.
Income rises
Income falls
Tastes and preferences
If a good becomes more desirable, more of it is demanded. Advertising and branding are the usual tools for changing this.
The good becomes more preferred
The good falls out of favour
Price of substitutes
A direct relationship: if good A gets dearer, buyers move to good B, so demand for B rises.
The price of the substitute rises
The price of the substitute falls
Price of complements
An inverse relationship: if good A gets dearer, fewer people buy A, so demand for the good that goes with it falls.
The price of the complement falls
The price of the complement rises
Number of consumers
A larger population means more buyers. A change in the age structure matters too, since different ages want different things.
Population rises, or the relevant age group grows
Population falls, or that age group shrinks
Future price expectations
Buyers time their purchases around what they think prices will do.
Prices are expected to rise, so people buy now
Prices are expected to fall, so people wait
Substitutes and complements
Related goods trip students up more than any other determinant, because the two types work in opposite directions.
Test yourself with a pair: if the price of one goes up and you would buy more of the other, they are substitutes. If you would buy less, they are complements.
Movement or shift?
This distinction decides whether your diagram is right or wrong, so it is worth slowing down on. The question to ask is always the same: what changed?
One curve on the left, two on the right. If you have drawn a second curve when only the price changed, the answer is already wrong however good the writing is.
Here is the trap worth knowing. A change in the price of this good moves you along the curve. A change in the price of a different good — a substitute or a complement — shifts the curve. Both questions mention a price, which is exactly why students get them the wrong way round. Read carefully whose price has moved.
The rule in one line
price of the good changes → movement along, change in QD | anything else changes → shift, change in demand
Worked examples
WORKED EXAMPLE
State the effect on the demand curve for coffee of each event: (a) the price of tea rises, (b) the price of coffee rises, (c) average incomes fall, (d) a health study makes coffee more popular. [4]
(a) Price of tea rises
Tea is a substitute, so buyers switch to coffee.
demand curve for coffee shifts right(b) Price of coffee rises
This is the price of the good itself, so no shift at all.
movement up the curve: a contraction in QD(c) Incomes fall
Lower real income reduces demand at every price.
shifts left(d) Coffee becomes more popular
Tastes and preferences have changed in its favour.
shifts righta right, b movement along, c left, d rightOnly (b) is a movement, and it is the one most students shift by mistake.
WORKED EXAMPLE
Using a diagram, explain the effect on the demand for printers of a large fall in the price of printer ink. [4]
Step 1: identify the relationship
Ink and printers are complements — they are bought and used together.
inverse relationship between the price of one and demand for the otherStep 2: work through the logic
Cheaper ink lowers the total cost of owning and running a printer, so printers become more attractive to buy.
Step 3: state the diagram change
The demand curve for printers shifts right, from D to D1. At the original price, more printers are now demanded.
Step 4: use the right words
This is an increase in demand, not an extension in quantity demanded, because the price of printers themselves has not changed.
Complement gets cheaper, so demand for printers shifts right
💡 Exam tip
Ask what changed before you draw anything. The price of this good, or something else?
Label shifts D to D1 or D to D2 and keep the new curve parallel to the old one unless the question says otherwise.
Name the determinant explicitly: “a change in tastes and preferences” scores better than “people like it more”.
For related goods, state the relationship first — substitute or complement — then the direction of the shift follows automatically.
Remember future expectations work backwards from intuition: expecting prices to rise increases demand today.
Population changes include age structure, not just total numbers. An ageing population shifts demand for some goods right and others left.
⚠️ Common mix-up
Shifting the curve when the good’s own price changes. That is always a movement along.
Getting substitutes and complements backwards. Substitutes give a direct relationship, complements an inverse one.
Saying “demand increases” when quantity demanded extends. The words are not interchangeable and examiners mark on them.
Forgetting “real” in real income. If prices rise as fast as wages, purchasing power has not changed and demand need not move.
Treating every good as normal. For some goods a rise in income lowers demand, which you will meet with income elasticity later.
Drawing the shifted curve crossing the original. Unless there is a specific reason, keep it parallel.
Up next: The Law of Supply and the Supply Curve — the same logic seen from the producer’s side of the market.
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